Financial services by achitta
- 1. PREPARED BY : ACHITTA ROLL NO : 16PBA005 MBA 4 TH SEM FINANCIAL SERVICES
- 2. Introduction HISTORY: The term "financial services" became more prevalent in the United States partly as a result of the Gramm-Leach-Bliley Act of the late 1990s. Companies usually have two distinct approaches to this new type of business. One approach would be a bank which simply buys an insurance company or an investment bank, keeps the original brands of the acquired firm.
- 3. Financial services These are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit card companies, insurance companies, accountancy companies, cons umer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises. Financial services companies are present in all economically developed geographic locations and tend to cluster in local, national, regional and international financial centers such as London, New York City, and Tokyo.
- 4. Characteristics of Financial services Financial services are Intangible. Financial services are customer oriented. They are perishable in nature & cannot be stored. They are dynamic in nature. They act as a link between the investor and borrower. They aid in distribution of risks.
- 5. TYPES OF FINANCIAL SERVICES Capital services Money market services Retail service Wholesale service Fund Based service Fee based services
- 6. Capital services: It consist of term lending institutions which mainly provide long term funds. Money market services: It consist of commercial banks, financial institutions, co-operative banks . Retail service: Services provided to individuals for direct consumption. Wholesale service: Services provided to corporate institutions which may be directly or indirectly converted into retail services. Fund based services: It consist of primary , secondary, foreign exchange, specialized financial services like leasing , hire purchase, factoring, mutual funds, venture capital etc. Fee based services: financial institutions operate in specialized fields in order to earn in form of fees, commission, brokerage or dividends like issue management , portfolio management, corporate counseling, credit rating etc.
- 7. TYPES OF FINANCIAL ACTIVITIES Fund based activities Fee based activities Modern activities
- 8. Fund based activities : 1. Underwriting or investment in shares , debentures, bonds, etc. of new issues (primary market activities). 2. Dealing in secondary market activities. 3. Participating in money market instruments. E.g. Discounting bills, treasury bills, certificate of deposit etc. 4. Involving in equipment leasing , hire purchasing , venture capitals. 5. Dealing in foreign exchange activities. Fee based activities: 1. Managing the capital issue in accordance with SEBI guidelines enabling promoters to market their issue. 2. Making arrangements for placement of capital and debt instruments with investment institutions. 3. Arrangement of funds from financial institutions for clients project cost or working capital.
- 9. Modern activities: 1. Rendering project advisory services right from the preparation of the project report till raising of funds. 2. Planning of memorandum and articles of association and assisting for their smooth carry out. 3. Guiding corporate customers in restructuring. 4. Acting as trustees to the debenture holders. 5. Recommending changes in managing structure and style 6. Hedging of risks by using swaps and other derivative products. 7. Advising clients. 8. Promoting credit rating agencies. 9. Minimizing cost of debt and determining optimum debt equity ratio.
- 10. Utility and significance of financial services The significance of financial services lies in: Channelizing the funds for economic growth and development of a country. Implementing monetary and debt management policies of government. Its utility lies in the following: Financial services form a major part of the gross domestic product. It ensures there is no shortage of funds for productive ventures. It reduces cost of transaction and borrowing by providing an adequate financial structure and system. It helps in making good financial decisions. It aids in allocation of risk and helps to minimize risk .
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